Webster shoemaker offers lesson for success

Larry Siff's grandfather founded a shoe factory in Webster. His father, Robert Siff, ran it for 40 years. And Larry Siff worked there for eight years — opening factories in Asia that he sold to a group of private equity firms. Larry Siff later shuttered a property in Webster, the last local remnants of his grandfather's company.

Mr. Siff's grandfather, Harry Siff, was born in Russia in 1897, and arrived in Worcester with his family at the age of 5. According to Larry Siff, Harry Siff was fond of repeating the expression: “Only in America, the land of opportunity.” And in 1930, Harry Siff seized some of that opportunity to open up B-W Footwear, a shoe manufacturer. Mr. Siff says that his grandfather paid employees in coins during the Depression — presumably because they did not trust paper money or checks. B-W Footwear thrived during World War II, manufacturing boots for American soldiers.

Meanwhile, Larry Siff attended Flagg Street School, Forest Grove, Phillips Academy Andover and Brown University (his father's alma mater). From there, he moved to Cincinnati to work for Procter & Gamble for five years, where he started a wholesale club business — despite some initial resistance from executives who feared his idea would take away business from P&G's core retailers. Larry says it's now a $3.5 billion business for P&G.

But Robert Siff invited his son back home to run B-W Footwear. With labor accounting for 30 percent of the cost of shoes, it was difficult for a company based in Webster — with its higher labor costs — to set competitive prices and make a profit. According to “B-W Footwear,” a 1988 Harvard Business School case study written by HBS professor David Yoffie, who grew up on Worcester's Winifred Avenue, the hourly wage for U.S. leather footwear manufacturing workers in 1984 ($7.32) was more than seven times that paid in Brazil ($0.88) and Korea ($0.95).

So Larry Siff opened 38 factories in nine countries. He shuttered B-W's local facilities, except for a facility in Webster that he tried to sell to Commerce Insurance. When Commerce, which now occupies the space, would not bite, Mr. Siff sold it to a frozen food distributor, which later sold it to Commerce.

But Mr. Siff was just getting started. He became president and chief executive officer of Cherry Tree Products, a high-end children's retailer. He was also president and CEO of Babystripes, an online retailer of luxury baby gifts that raised three rounds of financing before folding in the wake of the dot-com bust. Then in 2002, he joined Gordon Brothers, where he was instrumental in making acquisitions of companies such as Linens & Things and Polaroid.

In 2010, he started Neptune Advisors, a consulting firm that serves “mid market” companies, whose sales range from $10 million to $250 million. Needham-based Neptune has 15 people who deliver five consulting services: Pathway to Platinum — a process of working with a company to develop a three to five year business plan; Brand Acceleration — in which Neptune audits a company's brand by talking to customers and figuring out how to “take it to the next level;” Acquisitions — having done “hundreds of acquisitions at Gordon, Mr. Siff helps clients “make sure that “1+1 = 3 instead of 1.5”; Value for Today — a service that lets experienced company founders step back from operations and get their successor up and running; and Institutionalizing Knowledge — here, Neptune “puts down on paper all the processes and procedures that a company founder has developed so they won't be lost when the next generation takes over.”

When Mr. Siff started Neptune, he thought about moving to Worcester. And he still gets back here, because he is working with two companies in town that he declined to name. But Mr. Siff spends “80 percent” of his time in airplanes. Therefore, Worcester was at a huge competitive disadvantage in his mind to a location closer to an international airport. That is a feature that Worcester is sorely lacking in Mr. Siff's opinion.

He thinks Worcester needs to do a better job of “enticing graduates to stay.” He thinks that local colleges should invite local business people into the classroom to create a way for students to meet people who could hire them into local companies. He thinks Worcester should designate real estate for entrepreneurship. And he thinks that local colleges should provide links to mentors in the business community who can give them career advice.

With B-W Footwear, Mr. Siff demonstrated that he could see where the puck was headed and shape its future, so its owners would have a valuable property to sell. His ideas on keeping Worcester's talent local and building an international airport could help spur a new generation of entrepreneurs. There's no law that says Worcester's best entrepreneurial days should forever be in the 1880s or 1930s. But to build an entrepreneurial future for Worcester, the powers that be need to act.

Peter Cohan of Marlboro heads a management consulting and venture capital firm, teaches business strategy, and is the author of 11 books – most recently, “Hungry Start-up Strategy: Creating New Ventures with Limited Resources and Unlimited Vision.” His column runs Sundays and Wednesdays on telegram.com. His email address is peter@petercohan.com.

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